Explanation:
Recent global disinflation has been largely driven by the resolution of supply chain bottlenecks and increases in the supply of critical goods, notably in energy and manufacturing. Increased supply helps to bring down prices from the supply-side shocks that previously fueled inflation. The other options generally contribute to inflationary pressures rather than disinflation.
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Q.43 The past year has seen significant disinflation globally, driven by various factors. Which factor contributed most significantly to disinflation in advanced economies during this period?
A
Increased government spending on infrastructure projects.
B
Increased supply, particularly in critical sectors like manufacturing and energy.
C
Reduction in labor force participation due to demographic shifts.
D
Rampant consumer spending leading to demand-pull inflation.